Covid-19: the price we pay
A set of stringent compulsory regulations to prevent the spread of the coronavirus could prove too costly for many companies wanting to reopen under the relaxed regulations, resulting in closures of businesses, say analysts.
Analysts say extra expense might force many to close their doors.
Labour minister Thulas Nxesi yesterday laid down the law with a list of health and safety requirements for businesses planning on opening up their doors again this week.
However, said analysts, the additional costs that came with these requirements could prove another nail in the coffin for those already struggling to stay afloat.
The minister said yesterday he was “mindful that the directions impose a number of additional burdens upon employers” and that the department would “monitor this situation closely”.
Pressed further, he said while these new requirements would ultimately hike up running costs, “everyone just unfortunately has to go the extra mile”.
“It’s a question of the extra expense, or putting the lives of people at risk. If you want to operate, you need to understand that all of us will have to go an extra mile,” he said.
Political economist Daniel Silke said yesterday that additional expenditure, which might ordinarily seem insignificant, could have a severe impact on businesses in the current circumstances.
He said there would be “a battle for survival” as these businesses began to take stock of the broader economy, the demand for their services and the costs of implementing health-related measures.
“In the short term, I think we’ll get X amount of employees going back but I think the medium term is going to tell a different story,” he said.
“There will always be what one would call a ‘fourth dawn’ in the sense that most businesses will open, but there is great potential thereafter that once they’ve assessed the situation, they will have to make the hard decision to reassess, at best, their staffing needs, expenditure and the weak state of the economy.
“At worst, some may find the regulatory demands make it exceedingly difficult for them to continue operating.”
Econometrix’s Azar Jammine said the biggest challenge for businesses during this period was a shortage of cash flow.
“One would like to see government rescue schemes being implemented as soon as possible but they appear to be getting caught up in bureaucracy,” Jammine said.
He pointed out that this was not an issue unique to South Africa.
“In the United States, where government has set aside a huge amount of money, likewise businesses are struggling to access the impact.”
Jammine said while a number of schemes had been put in place in South Africa, it remained to be seen how effective they would prove.
Nxesi said not only did noncompliant employers risk having their businesses closed, but they could also face criminal prosecution.
“As the failure to comply fully with the [Occupational Health and Safety Act] is a criminal offence, failure to take the necessary measures to prevent the transmission of Covid-19 may result in criminal prosecution,” he said.
The minister yesterday went through a number of what he emphasised were the “minimum” health and safety requirements for those businesses which were permitted to open at stage four.
These included appointing a manager “to address the concerns of employees and workplace representatives; minimising the number of workers in the workplace; and screening employees as well as members of the public entering the workplace”.
“In relation to sanitisers and disinfectants, employers must provide sufficient quantities of hand sanitiser with at least 70% alcohol content … [and] provide each employee, free of charge, with at least two cloth masks to wear while at work or commuting,” the minister added.
“Ultimately, the employer remains responsible for the maintenance and upkeep of personal protective equipment.”
Medium term will tell a different story